Eqt Holdings Ltd. · ASX:EQT
Eqt — Equity Trustees — Merger or Acquisition (April 2014)
34 slides from Eqt's merger presentation, Apr 10, 2014
Slide 1: Acquisition of ANZ Trustees Limited
For personal use only Acquisition of ANZ Trustees Limited Investor Presentation – 10 April 2014 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only Overview This investor presentation (“Presentation”) has been prepared by Equity Trustees Limited (ABN 46 004 031 298) (“EQT” and “Company”). This Presentation has been prepared in relation to a placement and accelerated pro rata non-renounceable
Slide 3: Important notice and disclaimer
Important notice and disclaimer For personal use only Future performance This Presentation contains certain “forward looking statements”. Forward looking statements can generally be identified by the use of forward looking words such as, “expect”, “anticipate”, “likely”, “intend”, “should”, “could”,
Slide 4: Contents
Contents For personal use only 1 Transaction Overview 2 Overview of ANZ Trustees 3 Strategic Rationale 4 Transaction Impact 5 Transaction Funding Details 6 Key Risks NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 4
Slide 5: 1. Transaction Overview
For personal use only 1. Transaction Overview NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 5
Slide 6: Transformational acquisition
Transformational acquisition For personal use only EQT is acquiring ANZ Trustees from ANZ1 for $150m Overview of • ANZ Trustees Limited (ANZT) is a highly profitable business ANZT Recent track record of consistently strong operating margins and results • Founded in 1878 • A leading Australian lice
Slide 7: 5 year exclusive arrangement with ANZ
5 year exclusive arrangement with ANZ For personal use only • Acquisition of ANZT establishes a broader long-term relationship with ANZ • EQT is the only listed trustee business in Australia that has a strategic relationship with a Big 4 bank ‒ Exclusive referral agreement for 5 years1. Additional r
Slide 8: Value enhancement expected
Value enhancement expected For personal use only Significant value is created through the synergistic combination Acquisition • $150m (with final adjustment for NTA at completion date) price • Payable in cash at completion ANZT FY14 • Revenue of $23m forecast • EBIT of $11m financials1 • NPAT of $8m
Slide 9: The 'New' Equity Trustees
The ‘New’ Equity Trustees For personal use only Cements EQT as the largest independent ASX listed company with a dedicated trustee services focus Increased scale ‒ Expanded skills and resources base ‒ Broadens EQT’s distribution footprint Increases enduring revenue business lines Enhances EQ
Slide 10: 2. Overview of ANZ Trustees
For personal use only 2. Overview of ANZ Trustees NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 10
Slide 11: Overview of ANZ Trustees
Overview of ANZ Trustees For personal use only ANZT is one of Australia’s leading and most experienced licensed trustee companies Summary FY13 revenue by service line1 • ANZT is a leading Australian licensed trustee company with expertise in the provision of private trustee services Philanthrophy •
Slide 12: ANZ Trustees highlights
ANZ Trustees highlights For personal use only ANZT has a large client base that generates attractive margins A leading trustee • One of Australia’s leading and experienced licensed trustee companies company • Approximately $2.7 billion1 in funds under management (‘FUM’) Comprehensive • Able to suppo
Slide 13: ANZ Trustees business structure
ANZ Trustees business structure For personal use only ANZT is a trustee company with strong history over the last 136 years Trusts and Estate Investment Financial Compensation Product: Philanthropy Administration Mandates Administration Management Indigenous Trusts Service Overview Establishment of,
Slide 14: ANZ Trustees financial highlights
ANZ Trustees financial highlights For personal use only ANZT has shown consistent earnings growth and has a business mix largely skewed towards ‘enduring’ sources such as philanthropy, trusts and estate administration EBIT and EBIT margin1 Revenue2 (in $ millions) (in $ millions) 23.3 25.0 60% 21.7
Slide 15: 3. Strategic Rationale
For personal use only 3. Strategic Rationale NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 15
Slide 16: Compelling strategic rationale
Compelling strategic rationale For personal use only Acquisition of ANZT confirms EQT’s position as Australia’s largest independent dedicated trustee services company, and significantly improves its financial profile EQT becomes a • The combined business becomes a leader in the personal trust segmen
Slide 17: Compelling strategic rationale (cont'd)
Compelling strategic rationale (cont’d) For personal use only EQT establishes a key business relationship with ANZ Group to drive future growth Ongoing • Revenue opportunities have the potential to generate additional annual earnings of at least $2 million within arrangements with 2 years1 ANZ • 5 y
Slide 18: Higher margin, secure revenue
Higher margin, secure revenue For personal use only More than one-third of forecast revenue will be ‘enduring’ in the combined group • Enhanced revenue base through a higher percentage of enduring revenue • Through this acquisition, EQT will gain greater access to the philanthropic sector and improv
Slide 19: 4. Transaction Impact
For personal use only 4. Transaction Impact NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 19
Slide 20: Positive financial impact
Positive financial impact For personal use only Revenue growth is expected to enhance earnings further • Revenue opportunities have the potential to generate additional annual earnings of at least $2 million post integration1 • Additional earnings are also possible from the ANZ relationship. ANZ and
Slide 21: Projected FY14 earnings & dividends
Projected FY14 earnings & dividends For personal use only EQT and ANZT continue to perform strongly across all divisions in FY2014 • EQT FY14 forecast operating pre-tax profit1 is likely to be in line with previous guidance range of 10 to 15% above the prior year2 Due to new business development a
Slide 22: Cost synergies
Cost synergies For personal use only Substantial savings expected to be achieved from a combination of EQT and ANZT • Steady state opex savings of up to $4m p.a., based on FY14 forecast cost base1 • Primarily to be sourced from reduction in operating expenses through the creation of a combined back
Slide 23: Integration plan
Integration plan For personal use only A detailed integration plan has been developed and will commence immediately. Transition Phase First 6 months Project deliverables covering the logistics behind the transition of ANZ Trustees functions from ANZ to EQT • Transition IT systems to 575 Bourke Stree
Slide 24: Sources and uses of funds
Sources and uses of funds For personal use only The acquisition is funded by a Placement and Entitlement offer Sources of Funds Sources ($m) Equity raising 160 • $160m equity raising Fully underwritten by Baillieu Holst Limited and Credit Suisse Total sources 160 (Australia) Limited Uses of Funds
Slide 25: Transaction & integration costs
Transaction & integration costs For personal use only One-off costs will be incurred to purchase ANZT and fully integrate it into EQT • Acquisition costs of approximately $3 million, to be expensed in FY14 or FY151 Corporate, financial and legal advisory • Capital raising costs of approximately $7
Slide 26: 5. Transaction Funding Details
For personal use only 5. Transaction Funding Details NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 26
Slide 27: Equity offer details
Equity offer details For personal use only EQT is undertaking a fully underwritten ~$37m institutional placement and ~$123m accelerated non-renounceable entitlement offer to raise gross proceeds of at least $160m Offer size and • $37m underwritten placement to institutional investors (“Placement”) s
Slide 28: Equity offer timetable
Equity offer timetable For personal use only Event Date Announcement of Acquisition and Equity Raising Thursday 10 April 2014 Institutional Entitlement Offer opens Thursday 10 April 2014 Institutional Entitlement Offer and Placement bookbuild Friday 11 April 2014 EQT shares recommence trading Monday
Slide 29: 6. Key Risks
For personal use only 6. Key Risks NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 29
Slide 30: Risks: Transaction specific risks
Risks For personal use only Transaction specific risks Reliance on • Financial information presented for ANZT is on a management pro-forma basis, adjusted from historical reported accounts. These adjustments mainly relate to removal of information provided revenue streams and associated costs to be
Slide 31: Risks: Specific risks to the Combined Group
Risks For personal use only Specific risks to the Combined Group Changes in • A significant proportion of the Combined Group’s earnings will be derived from fees and charges based on levels of FUM and FUA of the Combined Group. The levels of investment markets FUM and FUA will reflect (in addition t
Slide 32: Risks: General risks
Risks For personal use only General risks Share price risk • There are general risks associated with an investment in the share market. As such, the value of New Shares may rise above or fall below the Rights Issue Price and Placement Price, depending on various factors including investor perception
Slide 33: Risks: General risks (cont'd)
Risks For personal use only General risks (cont’d) Insurance • The Combined Group will have insurance, including errors and omissions (professional indemnity) and directors’ and officers’ insurance, which it believes to be commensurate with industry standards, and adequate having regard to the busin
Slide 34: International offer restrictions
International offer restrictions For personal use only This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permit